EXAM #2 Flashcards by bailey freeman

TERM: Money or other negotiable instrument exchanged for the ownership or use of a product or service

Price

How well did you know this?

Not at all

Perfectly

TERM: Exchange of products/services for products/services; money is not used in the exchange

Barter

How well did you know this?

Not at all

Perfectly

TERM: Consumer’s perceived benefit from product/service, e.g. quality, durability

Value

How well did you know this?

Not at all

Perfectly

TERM: total money received from sale of product

Total Revenue

How well did you know this?

Not at all

Perfectly

TERM: average amount of money received from selling one unit of product = price

Average Revenue

How well did you know this?

Not at all

Perfectly

TERM: change in total revenue from producing & marketing one additional unit of that product

Marginal Revenue

How well did you know this?

Not at all

Perfectly

TERM: total expense incurred by a company to produce & market a product

Total Cost

How well did you know this?

Not at all

Perfectly

TERM: overhead = company’s expenses that are stable, and do not change with quantities of product produced & sold

Fixed Costs

How well did you know this?

Not at all

Perfectly

TERM: company’s expenses that change directly with the quantity of product produced & sold

Variable Cost

How well did you know this?

Not at all

Perfectly

TERM: change in total cost from producing one more unit of product

Marginal Cost

How well did you know this?

Not at all

Perfectly

TERM: conspiracy among companies to set prices for a product; illegal in the US

Price Fixing

How well did you know this?

Not at all

Perfectly

ERM: charging different prices to different buyers for the same products

Price Discrimination

How well did you know this?

Not at all

Perfectly

TERM: charging a very low price in order to drive competitors out of business

Predatory Pricing

How well did you know this?

Not at all

Perfectly

CONCEPT: curve on a graph showing number of units consumers will buy in a given time period, at different prices that might be charged

Demand Curve

How well did you know this?

Not at all

Perfectly

CONCEPT: a measure of the sensitivity of demand to changes in price

Price elasticity of Demand

How well did you know this?

Not at all

Perfectly

CONCEPT: analysis of relationship between total cost and total revenue to determine profitability at various levels of production

Break-Even Analysis

How well did you know this?

Not at all

Perfectly

CONCEPT: straight reduction in price on purchases during stated period of time

Discount

CONCEPT: promotional money paid by manufacturers to retailers in return for featuring manufacturer’s products

Allowance

CONCEPT: geographical pricing strategy where goods are placed Free On Board (FOB) a carrier; customer pays freight from factory to destination

FOB pricing

CONCEPT: geographical pricing strategy where company charges same price plus freight to all customers, regardless of location

Uniform Delivered Pricing

PRICING STRATEGY: setting a very high initial price for a new or innovative product

Skimming Pricing

PRICING STRATEGY: setting a low initial price on a new product to appeal quickly to the mass market

Penetration Pricing

PRICING STRATEGY: setting a high price to attract quality- or status-conscious consumers

Prestige Pricing

PRICING STRATEGY: setting prices for a line of products at a number of different price points

Price Lining

PRICING STRATEGY: pricing a few cents or dollars below an even number, e.g. $11.99 rather than $12.00

Odd-Even Pricing

PRICING STRATEGY: working backwards from price consumers are thought to be willing to pay

Target Pricing

PRICING STRATEGY: marketing 2 or more products or services in a single package price

Bundle Pricing

PRICING STRATEGY: pricing in differentiated categories to maximize revenue for finite capacity; commonly used by airlines

Yield-Management Pricing

PRICING STRATEGY: adding a fixed percentage to the cost of all items in a specific product category

Standard Mark-Up Pricing

PRICING STRATEGY: adding a specific amount to the cost of providing a product or service; common in some professions and in construction

Cost-Plus Pricing = markup pricing

PRICING STRATEGY: pricing based on experience that unit cost of particular product/service declines 10 – 30 % each time a company’s experience at producing and selling them doubles; used in electronics industry

Experience Curve Pricing

PRICING STRATEGY: pricing to achieve a target of a specific $ volume of profit

Target Profit Pricing

PRICING STRATEGY: pricing to return a profit of a specified percentage of sales; used by some supermarket chains

Target Return-On-Sales Pricing

PRICING STRATEGY: pricing to meet a target of a particular return on investment; commonly used by public utilities

Target Return-on-Investment Pricing. Target return pricing is also known as break-even pricing.

PRICING STRATEGY: pricing levels set by tradition, a standardized channel of distribution, or some other competitive factor

Customary Pricing

PRICING STRATEGY: pricing strategy in relation to competitors or market leaders

Above-, At-, or Below-Market Pricing

PRICING STRATEGY: intentionally pricing below customary price, in order to entice customers into sales venue, where they will be tempted to buy other goods, in addition to the loss-leader

Loss-Leader Pricing

PRICING STRATEGY: setting one price for all buyers of a product/service

One-Price Policy = fixed pricing

PRICING STRATEGY: setting different prices for products/services depending on individual buyers and purchase situations

Flexible-Price Policy = Dynamic Pricing

Name four things "Price" is:

the only element in the marketing mix that produces revenue; all other elements represent costs one of the most flexible elements of marketing mix: price can be changed quickly the biggest problem for many marketing executives historically the major factor affecting buyer choice

PRICE = _______ - _______ + _______

= LIST PRICE - DISCOUNTS + FEES